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High Value Health Care

We are spending far too much on health care, and getting far too little in return.

People living in the United States have access to some of the best medical care in the world, from life-saving drugs, to advanced medical devices, to cutting edge-surgical techniques. But our system is seriously flawed, with costs spiraling out of control leaving many Americans to spend more on care and often receiving worse care than they could get in many other countries.

We can do better. We need to shift incentives away from providing treatment and toward the quality of health care outcomes. We have the knowledge to stop providing treatments that do not work and implement simple solutions that improve results. We must hold insurance companies accountable to ensure they are delivering on their commitments to members. And we must drive down the cost of prescription drugs.

If we do that, our system will cost less by spending money where necessary to improve health. And that gives people security and meaningful control over decisions related to their health.

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Health Insurance Rate Watch

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After CALPIRG helped pass a law for better health care transparency, its analysis found some hospitals charging nearly three times as much for the same procedure at other hospitals in the state. Learn more.

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Typically, you get to see the price before you decide to buy — but that’s often not the case when it comes to health care. We're working to change that. Learn more.

Health care costs too much in this country because our system is inefficient and often prioritizes treatments that don't work or tests that are unnecessary. From giant price hikes for decades-old medicines like insulin to $10,000, surprise medical bills, unjustifiably high costs are everywhere in the U.S. health care system. At $10,000 per person each year, we spend twice as much money as similarly wealthy countries per person.

These excessive costs can be partially attributed to widespread waste that doesn’t actually improve quality of care — waste that is estimated to represent 25 percent or more of every dollar we spend on health care.

America’s high and rising expenditures for health care might be “worth it” if those expenditures translated into better health. But a large and growing body of research suggests that spending more on health care doesn’t necessarily translate into better health. Life expectancy gains that you’d expect from spending more on health care lag behind many other countries. In 1970, when our health spending was more in line with other countries, American’s life expectancy was one year above the 36 economically similar countries. Now it lags two years behind these countries despite significantly increasing spending compared to those other nations.

You can see these results play out in key health outcomes such as infant mortality, unmanaged asthma and diabetes, and heart attack mortality. In general, we often rank in the lower half of care results around the nation despite spending more.

Americans spend $1,000 more per person on prescription drugs than other wealthy nations, despite receiving the same health benefits from those prescriptions. Photo credit: wavebreakmedia via Shutterstock.com.

Back to the drawing board

U.S. PIRG is calling on policymakers to go back to the drawing board and start working on solutions that will fix the fundamental problems in the American health care system.

The bitter and contentious partisan debate in Washington is focused almost entirely on how to contain or assign the extraordinary cost of health insurance. And specific bills being debated would often make things worse for millions of Americans by degrading the quality of care, weakening protections for people with pre-existing conditions, and forcing many Americans to give up the coverage they currently have.

But the biggest failure with these proposals is that they fail to address the underlying problem with the American health care system: We are spending far too much, and getting far too little in return, for our health care dollar. Despite a health care system world-renowned for developing advanced treatments, and an army of skilled and well-meaning doctors, nurses, researchers, hospital and pharmacy staff, our patchwork health care system still fails to deliver an acceptable value proposition for consumers.

Injecting value into our health care system

America’s health care system is world-renowned for developing advanced treatments. But we often fail to get the basics right, frequently failing to provide effective, low-cost treatments that work, triggering unnecessary treatments and higher costs down the line. By expanding research into evidence-based medicine and holding providers accountable to higher standards of care, we know we can make progress.

U.S. PIRG is working toward solutions that will shift our health care system to focus on the value people are receiving, including:

Investing in prevention. Our current system rewards hospitals and doctors for performing as many procedures and prescribing as many drugs as possible, with little consideration given toward whether they actually keep us healthy and out of the hospital. We need to change those incentives and provide easier access to preventative services.

Making health care safer for patients. Medical errors are the third most common cause of death in America, yet we do surprisingly little to prevent them. For example, checklists have been shown to cut hospital-acquired infections in half, yet many hospitals have yet to implement this simple solution or have failed to do so effectively.

Comprehensive prescription drug reform. Americans spend $1,000 more per person on prescription drugs than other wealthy nations, despite receiving the same benefits from those prescriptions. Often that’s because the system encourages egregious price hikes, the development and marketing of the next “blockbuster” drug that may be of marginal health benefit, or delaying cheaper alternatives. Overhauling the patent system, encouraging the development and use of generic drugs, and increasing consumer choice can help boost health while saving money.

Holding health insurers accountable. There is often too little oversight to ensure insurance companies are delivering on their commitments to their members. In many states, insurers are not held to meaningful standards to ensure adequate access to needed services. Health insurance rate hikes receive little scrutiny even though states that review rates have cut a great deal of waste from premiums — for example, in Oregon, where OSPIRG’s advocacy for consumers has helped cut over $280 million from premiums since 2010. By focusing on insurers’ payment strategies and quantitative goals and results, closer scrutiny of health insurers can complement other efforts to drive systemic reforms to improve safety, increase care coordination, boost prevention, and bring down costs for consumers and small businesses.

Price transparency for health care services. The very least we can do about rising health care costs is make sure consumers can get prices for services or treatment up front, to allow for more informed decisions about value, encourage price competition that could help keep costs in check, and create accountability for unreasonably high-cost providers.

Preserving competition. With countless mergers in recent years between hospital systems, health insurers, pharmaceutical corporations and others, health care has become increasingly consolidated. Unfortunately, bigger is not always better for consumers; studies show consolidation often leads to higher prices and worse service. More scrutiny of health care mergers and tougher anti-trust enforcement against companies that seek to avoid competition could make a big difference.

A public option health plan. A public option health plan — e.g., providing Americans under 65 with the option of buying into Medicare or Medicaid — could provide consumers with a cheaper alternative to commercial health insurance, ensure that there are coverage options for consumers who lose their employer-based coverage or those in parts of the country where health insurers are dropping coverage, and put pressure on health insurers to provide a better deal or lose our business.

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